CADRE INSTITUTIONAL INVESTORS TRUST
CADRE LIQUID ASSET FUND - U.S. GOVERNMENT SERIES
SEMI-ANNUAL REPORT
APRIL 30, 2000
<PAGE>
CADRE INSTITUTIONAL INVESTORS TRUST
CADRE LIQUID ASSET FUND - U.S. GOVERNMENT SERIES
CIIT CHAIRMAN'S SEMI-ANNUAL REPORT LETTER
--------------------------------------------------------------------------------
Dear Shareholders,
It has been six months since my last communication to the shareholders of Cadre
Institutional Investors Trust (the "Fund"), and although we have seen many
exciting changes, our most important objectives have remained constant. Those
objectives, providing the Fund's shareholders with an attractive rate of return,
consistent with preservation of capital and maintenance of liquidity, continue
to be achieved.
One exciting feature of the Fund's master/feeder investment structure is that it
has the ability to add "external feeders" to the investment portfolios. An
external feeder is an existing fund that wishes to invest in the U.S. Government
Money Market Portfolio or the Money Market Portfolio. Adding external feeders to
the portfolios, benefits the Fund by stabilizing asset balances through reduced
seasonality of cash flows, and increasing the investment advisor's buying power.
To date, the Michigan School District Liquid Asset Fund Plus ($567 million) and
the Illinois Park District Liquid Asset Fund Plus ($63 million) have joined on
as external feeders. We are currently lining up additional prospective feeder
funds to add in the near future.
An update to the Year 2000 readiness - as you are all aware, Cadre Financial
Services, Inc. ("Cadre"), the Fund's investment advisor and administrator, had
run tests on its critical systems throughout 1999 to ensure Y2K readiness. The
final and ultimate live test came on January 1, 2000, and I am pleased to inform
you that the results of that test were positive. Cadre's internal computer
systems, and the normal business activities and operations that depend on them
were not adversely impacted by Y2K sensitive dates.
With the success of our Y2K testing and planning behind us, Cadre is now better
able to focus its technology efforts on improvements that will directly benefit
the shareholders of the Fund. In the very near future, perhaps as early as July,
Cadre will roll out a new and improved version of its online reporting system,
Compass. This new version of Compass will provide a multitude of useful features
to shareholders. It will allow shareholders to make online fund and account
transfers, it will provide notifications of deposits, new account summary
reports and the ability to select electronic-only statements and confirms.
Additionally, statement viewing and printing online will be greatly enhanced. Be
assured that we are confident that Compass will see even more exciting
enhancements before the calendar year's end.
Finally, on behalf of the Fund's Board of Trustees, I thank you for your
continued support and confidence in our product.
William T. Sullivan, Jr.
Chairman
1
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CADRE INSTITUTIONAL INVESTORS TRUST
CADRE LIQUID ASSET FUND - U.S. GOVERNMENT SERIES
ECONOMIC OVERVIEW
--------------------------------------------------------------------------------
The period began with the federal funds target rate at 5.25%. Continued strong
economic growth, a result of an extremely tight labor market, as evidenced by
the unemployment rate declining below 4% in April of this year, led the Federal
Reserve to raise the federal funds target rate four times during the period. In
fact, on March 21 st, the Federal Reserve elected to raise the fed funds target
rate 50 basis points from 6% to 6.50%, bringing it to its highest level since
1991. This marks the sixth time since June of 1999 in which the Fed has raised
the fed funds target rate taking it from 4.75% to 6.50%.
The economy continued to grow at a brisk pace. First Quarter Gross Domestic
Product (GDP) rose 5.4%, following a 7.4% increase in the Fourth Quarter of
1999. Personal consumption expenditures, which account for two-thirds of overall
economic activity, rose at a 7.5% annual rate. The increase is the fastest since
the third quarter of 1985, when spending also rose at a 7.5% annual rate.
Throughout the tremendous expansion, inflation has remained well behaved.
However, recent signs have suggested that the tight labor market has put upward
pressure on wages and prices. The employment cost (ECI) increased 1.4% in the
first quarter, up 4.3% from a year earlier. The first quarter increase in the
ECI compared with a year earlier was the biggest since a 4.3% rise in the final
three months of 1991. Wages and salaries, which make up about three quarters of
the index, rose 1.1% in the first quarter, after rising 0.9% in the fourth
quarter. Compared with the first quarter of last year, wages were up 4%.
Several indicators have showed a pickup in inflation. The GDP price deflator, a
measure of price increases followed by many investors, grew at a 2.7% annual
rate in the first quarter. That is the fastest since the first quarter of 1997.
The Producer Price Index (PPI) was up 3.9% compared with April of last year and
prices are also up at the consumer level. The Consumer Price Index (CPI) rose at
a 4.3% annual rate in the first four months of the year, compared with a 3.3%
pace in the same period a year ago. The core rate was rising at a 2.9% annual
rate in the first four months compared with a 2.1% pace in the same period of
1999. These signs of increasing inflation combined with the decline in the
unemployment rate are what most likely led the Fed to abandon their gradualist
approach of 25 basis point tightenings and to raise the fed funds target 50
basis points in May.
Due to those recent signs that suggest inflation pressures have begun to emerge
and currently there are very few signs of any slowdown in the economy, we expect
the fed to further raise the fed funds target at least once more in the months
ahead. However, we do expect these rate hikes to cause economic growth to slow
in the months ahead.
2
<PAGE>
TRUSTEES AND OFFICERS
William T. Sullivan, Jr. C. Roderick O'Neil
Chairman and Trustee Trustee
Frank Bivona William J. Reynolds
Trustee Trustee
Harvey A. Fein Dr. Don I. Tharpe
Trustee Trustee
Michael P. Flanagan Anne E. Gill, Esq.
Trustee Secretary
Russell E. Galipo Peter Poillon
Trustee Treasurer
INVESTMENT ADVISOR/ADMINISTRATOR/TRANSFER AGENT
Cadre Financial Services, Inc.
905 Marconi Avenue
Ronkonkoma, New York 11779
DISTRIBUTOR
Cadre Securities, Inc.
905 Marconi Avenue
Ronkonkoma, New York 11779
CUSTODIAN
US Bank
US Bank Place
601 Second Avenue South
Minneapolis, Minnesota 55402
INDEPENDENT PUBLIC ACCOUNTANTS
KPMG LLP
757 Third Avenue
New York, New York 10017
LEGAL COUNSEL
Schulte, Roth & Zabel
900 Third Avenue
New York, New York 10022
3
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<TABLE>
<CAPTION>
CADRE INSTITUTIONAL INVESTORS TRUST
CADRE LIQUID ASSET FUND - U.S. GOVERNMENT SERIES
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
ASSETS:
<S> <C>
Investment in Cadre Institutional Investors Trust --
U.S. Government Money Market Portfolio,
at value $34,377,513
Other assets 215,000
-----------
Total Assets 34,592,513
-----------
LIABILITIES:
Administration fees payable 2,713
Transfer agent fees payable 714
Accrued trustees' fees and expenses 1,415
Other accrued expenses 16,020
-----------
Total Liabilities 20,862
-----------
NET ASSETS $34,571,651
===========
Shares of beneficial interest outstanding 34,571,651
===========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE $ 1.00
===========
NET ASSETS CONSIST OF:
Common Stock, at par value $ 34,572
Paid-in-capital in excess of par value 34,537,079
-----------
NET ASSETS $34,571,651
===========
The accompanying notes are an integral part of these financial statements.
4
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<CAPTION>
CADRE INSTITUTIONAL INVESTORS TRUST
CADRE LIQUID ASSET FUND - U.S. GOVERNMENT SERIES
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED APRIL 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
INVESTMENT INCOME:
INVESTMENT INCOME AND EXPENSES ALLOCATED FROM CIIT U.S
GOVERNMENT MONEY MARKET PORTFOLIO
<S> <C>
Interest $ 1,041,511
Expenses 18,927
-----------
NET INVESTMENT INCOME FROM CIIT U.S.GOVERNMENT MONEY
MARKET PORTFOLIO 1,022,584
EXPENSES:
Administration fees $ 34,563
Custodian fees 28,948
Transfer agent fees 9,095
Audit fees 4,987
Registration fees 4,510
Rating agency fees 3,926
Printing fees 2,673
Legal fees 1,734
Other expenses 219
-----------
Total expenses 90,655
Less: Fee waivers and expense reimbursements (27,801)
-----------
Net expenses 62,854
-----------
NET INVESTMENT INCOME $ 959,730
===========
The accompanying notes are an integral part of these financial statements.
5
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<CAPTION>
CADRE INSTITUTIONAL INVESTORS TRUST
CADRE LIQUID ASSET FUND - U.S. GOVERNMENT SERIES
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
-----------------------------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED
ENDED APRIL OCTOBER 31,
30, 2000 1999
---------------- -------------
OPERATIONS:
<S> <C> <C>
Net investment income $ 959,730 $ 2,749,576
Net realized gains on investment securities transactions 0 601
------------- -------------
Net increase in net assets resulting from operations 959,730 2,750,177
------------- -------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income (960,125) (2,749,576)
------------- -------------
SHARE TRANSACTIONS:
Net proceeds from sale of shares 315,608,359 384,801,853
Net asset value of shares issued to shareholders from
reinvestment of dividends 960,125 2,749,576
Cost of shares redeemed (327,144,409) (440,632,708)
------------- -------------
Net decrease in net assets resulting from share transactions (10,575,925) (53,081,279)
------------- -------------
Net decrease in net assets (10,576,320) (53,080,678)
NET ASSETS:
Beginning of period 45,147,971 98,228,649
------------- -------------
End of period $ 34,571,651 $ 45,147,971
============= =============
OTHER INFORMATION:
Share Transactions:
Shares sold 315,608,359 384,801,853
Shares issued to shareholders from reinvestment of dividends 960,125 2,749,576
Shares repurchased (327,144,409) (440,632,708)
------------- -------------
Net decrease in shares outstanding (10,575,925) (53,081,279)
============= =============
The accompanying notes are an integral part of these financial statements.
6
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<PAGE>
CADRE INSTITUTIONAL INVESTORS TRUST
CADRE LIQUID ASSET FUND - U.S. GOVERNMENT SERIES
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
NOTE 1 - ORGANIZATION
Cadre Institutional Investors Trust (the "Trust") (formerly known as Ambac
Treasurer's Trust), was organized in April 1996, as a Delaware business trust
and is registered as an open-end management investment company under the
Investment Company Act of 1940, as amended (the "1940 Act"). The Trust is
comprised of ten series as follows: Cadre Liquid Asset Fund - U.S. Government
Series, Cadre Liquid Asset Fund - Money Market Series, Cadre Affinity Fund -
U.S. Government Series, Cadre Affinity Fund - Money Market Series, Cadre Reserve
Fund - U.S. Government Series, Cadre Reserve Fund - Money Market Series, Cadre
SweepCash Fund - U.S. Government Series, Cadre SweepCash Fund - Money Market
Series, U.S. Government Money Market Portfolio and Money Market Portfolio.
Previously the Trust offered shares of Ambac U.S. Treasury Money Market Fund,
which ceased operations on June 30, 1997. The accompanying financial statements
and financial highlights are those of Cadre Liquid Asset Fund - U.S. Government
Series (the "Fund") (formerly known as Cadre Institutional Investors Trust
Liquid Asset Fund and U.S. Government Money Market Fund). The Fund commenced
operations on April 24, 1996.
The Fund invests all of its investable assets in the U.S. Government Money
Market Portfolio ("the Portfolio"). The Portfolio is a series of the Trust that
has substantially the same investment objectives, policies and restrictions as
the Fund.
The value of the Fund's investment in the Portfolio, as reflected in the
Statement of Assets and Liabilities, reflects the Fund's proportionate interest
in the net assets of the Portfolio (21.3% at April 30, 2000). The performance of
the Fund is directly affected by the performance of the Portfolio. The financial
statements of the Portfolio, including the Schedule of Investments, are included
elsewhere in this report and should be read in conjunction with the Fund's
financial statements.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
VALUATION OF SECURITIES
Valuation of securities by the Portfolio is discussed in Note 2 of the
Portfolio's Notes to Financial Statements, which are included elsewhere in this
report.
7
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CADRE INSTITUTIONAL INVESTORS TRUST
CADRE LIQUID ASSET FUND - U.S. GOVERNMENT SERIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
APRIL 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
INVESTMENT INCOME
The Fund records its proportionate share of net investment income and realized
gains and losses each day. Net investment income and realized gains and losses
of the Portfolio are allocated on a pro-rata basis among the Fund and the other
investors in the Portfolio at the time of such determination.
DIVIDENDS TO SHAREHOLDERS
Substantially all of the Fund's net investment income and net realized capital
gains, if any, are declared as dividends daily and paid monthly. Net short-term
capital gains, if any, are distributed in accordance with the requirements of
the Internal Revenue Code of 1986, as amended (the "Code"), and may be reflected
in the Fund's daily dividend rate. Substantially all of the realized net
long-term capital gains, if any, are declared and paid annually, except that an
additional capital gains distribution may be made in a given year to the extent
necessary to avoid the imposition of federal excise tax on the Fund. Income
dividends and capital gain distributions are determined in accordance with
income tax regulations, which may differ from generally accepted accounting
principles.
FEDERAL INCOME TAXES
The Fund is treated as a separate entity for federal income tax purposes and
intends to qualify each year as a "regulated investment company" under
Subchapter M of the Code and to make distributions of substantially all of its
income, including net realized capital gains, if any, to relieve it from
substantially all Federal and excise taxes. Therefore, no Federal tax provision
is required.
EXPENSES
Expenses incurred by the Trust with respect to any two or more funds in the
Trust are allocated in proportion to the net assets of each fund, except where
allocation of direct expenses to each fund can otherwise be made fairly.
Expenses directly attributable to a fund are charged to that fund.
NOTE 3 - TRANSACTIONS WITH AFFILIATES
The Trust, on behalf of the Fund, has entered into an Administration Agreement
with Cadre Financial Services, Inc. ("Cadre"), a wholly-owned subsidiary of
Ambac Financial Group, Inc., under which Cadre is responsible for certain
aspects of the administration and operation of the Fund. For its services, Cadre
is paid an annual fee of 0.19% of the Fund's first $250 million average daily
net assets, 0.165% of the Fund's next $750 million average daily net assets and
0.14% of the Fund's average daily net assets in excess of $1 billion.
The Trust, on behalf of the Fund, has entered into a Transfer Agent Agreement
with Cadre, under which Cadre is responsible for providing shareholder
recordkeeping services to the Fund. For its services, Cadre is paid an annual
fee of 0.05% of the Fund's first $250 million average daily net assets, 0.04% of
the Fund's next $750 million average daily net assets and 0.03% of the Fund's
average daily net assets in excess of $1 billion.
8
<PAGE>
CADRE INSTITUTIONAL INVESTORS TRUST
CADRE LIQUID ASSET FUND - U.S. GOVERNMENT SERIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
APRIL 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
Cadre Securities, Inc. (the "Distributor"), a wholly-owned subsidiary of Ambac
Financial Group, Inc., acts as the exclusive distributor of the Trust's shares.
Certain officers of the Trust may be officers of Cadre and/or the Distributor or
their affiliates. Such officers receive no compensation from the Trust for
serving in their respective roles. Trustees who are not employees of Cadre
and/or the Distributor or their affiliated companies, are each paid an annual
retainer of $5,000 and receive an attendance fee of $750 for each meeting of the
Board of Trustees they attend. Members of the Audit Committee receive an
attendance fee of $750 for each Audit Committee meeting they attend. The
Chairman of the Audit Committee receives an additional $1,000 annual fee.
Officers of the Trust receive no compensation from the Trust.
NOTE 4 - WAIVER OF FEES AND REIMBURSEMENT OF EXPENSES
Cadre has voluntarily agreed to waive a portion of its fees and to reimburse the
Fund for certain expenses to the extent the total operating expenses of the Fund
exceed 0.45% (annualized) of the Funds average daily net assets. During the six
month period ended April 30, 2000, Cadre waived fees of $27,801 so that the Fund
could meet this expense limitation.
The Fund has adopted an Excess Expense Reimbursement Plan (the "Plan") pursuant
to which the Fund has agreed to reimburse Cadre for any waived fees or
reimbursed expenses to the extent the Fund's total operating expenses are less
than the expense limitation of 0.45% (annualized) of the Fund's average daily
net assets. The Plan, which has a term of three years, terminates on March 16,
2002. During the six month period ended April 30, 2000, the Fund did not
reimburse Cadre for any fees waived or expenses reimbursed pursuant to the terms
of the Plan.
9
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<TABLE>
<CAPTION>
CADRE INSTITUTIONAL INVESTORS TRUST
CADRE LIQUID ASSET FUND - U.S. GOVERNMENT SERIES
FINANCIAL HIGHLIGHTS (UNAUDITED)
---------------------------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding, is as follows:
FOR THE PERIOD
APRIL 24, 1996
(COMMENCEMENT
SIX MONTHS YEAR ENDED OCTOBER 31, OF OPERATIONS)
ENDED ------------------------- THROUGH
APRIL 30, OCTOBER 31,
2000 1999 1998 1997 1996
---------- ----- ------ ------ -----
For a share outstanding
throughout the period
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- -------
Income from investment
operations:
Net investment income (1) 0.026 0.046 0.052 0.053 0.027
Less dividends:
Dividends from net investment
income (0.026) (0.046) (0.052) (0.053) (0.027)
------- ------- ------- ------- -------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= =======
Ratio/Supplemental Data:
Total Return 2.67%** 4.70% 5.17% 5.39% 2.72%**
Net assets, end of period (000's) $34,572 $45,148 $98,229 $138,661 $70,881
Ratio to average net assets:
Net investment Income
including reimbursement/
waiver 5.25%* 4.61% 5.17% 5.38% 5.18%*
Operating expenses including
reimbursement/waiver 0.45%* 0.45% 0.41% 0.26% 0.20%*
Operating expenses excluding
reimbursement/waiver 0.60%* 0.55% 0.47% 0.49% 0.75%*
(1) Net investment income per share before waiver of fees and reimbursement of
expenses by the Investment Advisor was $0.0255, $0.0451, $0.0523, $0.0514 and
$0.024 for six months ended April 30, 2000, and the years ended October 31,
1999, 1998 and 1997 and the period ended October 31, 1996, respectively.
<FN>
*-Annualized **-Unannualized
</FN>
</TABLE>
10
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<TABLE>
<CAPTION>
CADRE INSTITUTIONAL INVESTORS TRUST
U.S. GOVERNMENT MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS
APRIL 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
PRINCIPAL YIELD TO
AMOUNT DESCRIPTION MATURITY ON DATE VALUE
(IN THOUSANDS) MATURITY DATE OF PURCHASE (NOTE 2)
-------------- ------------- ----------- --------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 79.9%
<C> <S> <C> <C>
$ 30,000 Federal Home Loan Bank 5.97 % $ 30,000,000
May 1, 2000
5,225 Federal Home Loan Bank 6.06 5,206,001
May 23, 2000
5,000 Federal Home Loan Bank 5.45 5,000,545
July 19, 2000
1,000 Federal Home Loan Bank 5.51 999,978
July 21, 2000
6,000 Federal Home Loan Bank 6.15 5,906,583
August 4, 2000
3,500 Federal Home Loan Bank 6.40 3,499,385
January 24, 2001
6,210 Federal Home Loan Mortgage Co. 5.97 6,210,000
May 1, 2000
35,460 Federal Home Loan Mortgage Co. 6.10 35,330,559
May 23, 2000
11,175 Federal Home Loan Mortgage Co. 6.25 11,089,651
June 15, 2000
9,746 Federal National Mortgage Assoc. 6.16 9,695,562
June 1, 2000
The accompanying notes are an integral part of these financial statements.
11
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CADRE INSTITUTIONAL INVESTORS TRUST
U.S. GOVERNMENT MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
APRIL 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
Principal Yield to
Amount Description Maturity on Date Value
(IN THOUSANDS) MATURITY DATE OF PURCHASE (NOTE 2)
-------------- ------------- ----------- --------
U.S. GOVERNMENT AGENCY OBLIGATIONS - (CONTINUED)
$ 4,500 Federal National Mortgage Assoc. 5.44 % $ 4,499,493
June 9, 2000
8,000 Federal National Mortgage Assoc. 6.14 7,940,300
June 15, 2000
3,500 Federal National Mortgage Assoc. 6.55 3,497,139
February 23, 2001
------------
Total U.S. Government Agency Obligations 128,875,196
------------
(amortized cost $128,875,196)
REPURCHASE AGREEMENT - 19.9%
32,079 Repurchase Agreement with Goldman Sachs 5.32 32,079,000
Group LP, 5.80%, dated April 28, 2000,
due May 1, 2000, repurchase price
$32,094,505 (collateralized by various
Government National Mortgage Association
Pools with a market value of $32,720,580)
-------------
Total Repurchase Agreement 32,079,000
-------------
(amortized cost $32,079,000)
Total Investments - 99.8% 160,954,196
(amortized cost $160,954,196)
Other assets in excess of liabilities - 0.2% 276,443
-------------
Net Assets - 100.0% $161,230,639
=============
The accompanying notes are an integral part of these financial statements.
12
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<CAPTION>
CADRE INSTITUTIONAL INVESTORS TRUST
U.S. GOVERNMENT MONEY MARKET PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
ASSETS:
<S> <C>
Investments, at value $160,954,196
Cash 775
Interest receivable 306,035
------------
Total Assets 161,261,006
------------
LIABILITIES:
Investment advisory fees payable 7,788
Accrued trustees' fees and expenses 8,301
Other accrued expenses 14,278
------------
Total Liabilities 30,367
------------
NET ASSETS $161,230,639
============
The accompanying notes are an integral part of these financial statements.
13
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<TABLE>
<CAPTION>
CADRE INSTITUTIONAL INVESTORS TRUST
U.S. GOVERNMENT MONEY MARKET PORTFOLIO
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED APRIL 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
INVESTMENT INCOME:
<S> <C>
Interest $4,188,217
EXPENSES:
Investment advisory fees 43,444
Audit fees 12,465
Trustees' fees and expenses 6,153
Custodian fees and expenses 3,927
Legal fees 1,286
Other expenses 5,296
----------
Total expenses 72,571
----------
NET INVESTMENT INCOME $4,115,646
==========
The accompanying notes are an integral part of these financial statements.
14
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<TABLE>
<CAPTION>
CADRE INSTITUTIONAL INVESTORS TRUST
U.S. GOVERNMENT MONEY MARKET PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
---------------------------------------------------------------------------------------
FOR THE PERIOD
DECEMBER 31, 1998
(COMMENCEMENT
SIX MONTHS OF OPERATIONS
ENDED THROUGH
APRIL 30, 2000 OCTOBER 31, 1999
--------------- ----------------
OPERATIONS:
<S> <C> <C>
Net investment income $ 4,115,646 $ 6,610,873
--------------- ---------------
SHARE TRANSACTIONS:
Contributions 859,917,886 1,431,230,426
Withdrawals (887,276,289) (1,253,367,903)
--------------- ---------------
Net (decrease) increase in net assets
resulting from share transactions (27,358,403) 177,862,523
--------------- ---------------
Total (decrease) increase in net assets (23,242,757) 184,473,396
NET ASSETS:
Beginning of period 184,473,396 0
--------------- ---------------
End of period $ 161,230,639 $ 184,473,396
=============== ===============
-------------------------------------------------------------------------------------
SUPPLEMENTARY DATA:
Ratio to Average Net Assets
Net expenses 0.10%* 0.15%*
Net investment income 5.67%* 4.92%*
<FN>
* - Annualized
The accompanying notes are an integral part of these financial statements.
15
</FN>
</TABLE>
<PAGE>
CADRE INSTITUTIONAL INVESTORS TRUST
U.S. GOVERNMENT MONEY MARKET PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
NOTE 1 - ORGANIZATION
Cadre Institutional Investors Trust (the "Trust") (formerly known as Ambac
Treasurer's Trust), was organized in April 1996, as a Delaware business trust
and is registered as an open-end management investment company under the
Investment Company Act of 1940, as amended (the "1940 Act"). The Trust is
comprised of ten series as follows: Cadre Liquid Asset Fund - U.S. Government
Series, Cadre Liquid Asset Fund - Money Market Series, Cadre Affinity Fund -
U.S. Government Series, Cadre Affinity Fund - Money Market Series, Cadre Reserve
Fund - U.S. Government Series, Cadre Reserve Fund - Money Market Series, Cadre
SweepCash Fund - U.S. Government Series, Cadre SweepCash Fund - Money Market
Series, U.S. Government Money Market Portfolio and Money Market Portfolio.
Previously the Trust offered the Ambac U.S. Treasury Money Market Fund, which
ceased operations on June 30, 1997. The accompanying financial statements and
financial highlights are those of the U.S. Government Money Market Portfolio
(the "Portfolio"). The Portfolio commenced investment operations on December 21,
1998 upon a tax free transfer of securities from the Cadre Liquid Asset Fund -
U.S. Government Series.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the
Portfolio in the preparation of its financial statements.
VALUATION OF SECURITIES
Investments are valued at amortized cost, which approximates market value. The
amortized cost method of valuation values a security at its cost on the date of
purchase and thereafter assumes a constant amortization to maturity of any
discount or premium, regardless of the impact of fluctuating interest rates on
the market value of the instruments.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME
Securities transactions are recorded on a trade date basis. Interest income,
which includes the amortization of discounts and premiums, if any, is recorded
on an accrual basis. Net realized gains or losses on sales of securities are
determined by the identified cost method.
16
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CADRE INSTITUTIONAL INVESTORS TRUST
U.S. GOVERNMENT MONEY MARKET PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
APRIL 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
REPURCHASE AGREEMENTS
The Portfolio may engage in repurchase agreement transactions with institutions
that the Trust's adviser has determined are creditworthy pursuant to guidelines
established by the Trust's Board of Trustees. The Portfolio's custodian or
designated subcustodians, as the case may be under tri-party repurchase
agreements, takes possession of the collateral pledged for investments in
repurchase agreements on behalf of the Portfolio. It is the policy of the
Portfolio to value the underlying collateral daily on a mark-to-market basis to
determine that the value, including accrued interest, is at least equal to the
repurchase price plus accrued interest. In the event of default of the
obligation to repurchase, the Portfolio has the right to liquidate the
collateral and apply the proceeds in satisfaction of the obligation. Under
certain circumstances, in the event of default or bankruptcy by the other party
to the agreement, realization and/or retention of the collateral or proceeds may
be subject to legal proceedings.
FEDERAL INCOME TAXES
The Portfolio intends to be treated as a partnership for federal income tax
purposes. As such, each investor in the Portfolio will be taxed on its share of
the Portfolio's ordinary income and capital gains. It is intended that the
Portfolio's assets will be managed in such a way that an investor in the
Portfolio will be able to satisfy the requirements of Subchapter M of the
Internal Revenue Code of 1986, as amended. The cost of securities is
substantially the same for book and tax purposes.
EXPENSES
Expenses incurred by the Trust with respect to any two or more funds in the
Trust are allocated in proportion to the net assets of each fund, except where
allocation of direct expenses to each fund can otherwise be made fairly.
Expenses directly attributable to a fund are charged to that fund.
NOTE 3 - TRANSACTIONS WITH AFFILIATES
The Trust, on behalf of the Portfolio, has entered into an Investment Advisory
Agreement with Cadre Financial Services, Inc. ("Cadre"), a wholly-owned
subsidiary of Ambac Financial Group, Inc., whereby Cadre provides investment
advisory services and administrative services to the Portfolio. For its
services, Cadre is paid an annual fee of 0.06% of the Portfolio's average daily
net assets
Cadre Securities, Inc. (the "Distributor"), a wholly-owned subsidiary of Ambac
Financial Group, Inc., acts as the exclusive placement agent of the Trust's
shares.
Certain officers of the Trust may be officers of Cadre and/or the Distributor or
their affiliates. Such officers receive no compensation from the Trust for
serving in their respective roles. Trustees who are not employees of Cadre
and/or the Distributor or their affiliated companies, are each paid an annual
retainer of $5,000 and receive an attendance fee of $750 for each meeting of the
Board of Trustees they attend. Members of the Audit Committee receive an
attendance fee of $750 for each Audit Committee meeting they attend. The
Chairman of the Audit Committee receives an additional $1,000 annual fee.
Officers of the Trust receive no compensation from the Trust.
17
<PAGE>
CADRE INSTITUTIONAL INVESTORS TRUST
CADRE LIQUID ASSET FUND - MONEY MARKET SERIES
SEMI-ANNUAL REPORT
APRIL 30, 2000
<PAGE>
CADRE INSTITUTIONAL INVESTORS TRUST
CADRE LIQUID ASSET FUND - MONEY MARKET SERIES
CIIT CHAIRMAN'S SEMI-ANNUAL REPORT LETTER
--------------------------------------------------------------------------------
Dear Shareholders,
It has been six months since my last communication to the shareholders of Cadre
Institutional Investors Trust (the "Fund"), and although we have seen many
exciting changes, our most important objectives have remained constant. Those
objectives, providing the Fund's shareholders with an attractive rate of return,
consistent with preservation of capital and maintenance of liquidity, continue
to be achieved.
One exciting feature of the Fund's master/feeder investment structure is that it
has the ability to add "external feeders" to the investment portfolios. An
external feeder is an existing fund that wishes to invest in the U.S. Government
Money Market Portfolio or the Money Market Portfolio. Adding external feeders to
the portfolios benefits the Fund by stabilizing asset balances through reduced
seasonality of cash flows, and increasing the investment advisor's buying power.
To date, the Michigan School District Liquid Asset Fund Plus ($567 million) and
the Illinois Park District Liquid Asset Fund Plus ($63 million) have joined on
as external feeders. We are currently lining up additional prospective feeder
funds to add in the near future.
An update to the Year 2000 readiness - as you are all aware, Cadre Financial
Services, Inc. ("Cadre"), the Fund's investment advisor and administrator, had
run tests on its critical systems throughout 1999 to ensure Y2K readiness. The
final and ultimate live test came on January 1, 2000, and I am pleased to inform
you that the results of that test were positive. Cadre's internal computer
systems, and the normal business activities and operations that depend on them
were not adversely impacted by Y2K sensitive dates.
With the success of our Y2K testing and planning behind us, Cadre is now better
able to focus its technology efforts on improvements that will directly benefit
the shareholders of the Fund. In the very near future, perhaps as early as July,
Cadre will roll out a new and improved version of its online reporting system,
Compass. This new version of Compass will provide a multitude of useful features
to shareholders. It will allow shareholders to make online fund and account
transfers, it will provide notifications of deposits, new account summary
reports and the ability to select electronic-only statements and confirms.
Additionally, statement viewing and printing online will be greatly enhanced. Be
assured that we are confident that Compass will see even more exciting
enhancements before the calendar year's end.
Finally, on behalf of the Fund's Board of Trustees, I thank you for your
continued support and confidence in our product.
William T. Sullivan, Jr.
Chairman
1
<PAGE>
CADRE INSTITUTIONAL INVESTORS TRUST
CADRE LIQUID ASSET FUND - MONEY MARKET SERIES
ECONOMIC OVERVIEW
--------------------------------------------------------------------------------
The period began with the federal funds target rate at 5.25%. Continued strong
economic growth, a result of an extremely tight labor market, as evidenced by
the unemployment rate declining below 4% in April of this year, led the Federal
Reserve to raise the federal funds target rate four times during the period. In
fact, on March 21st, the Federal Reserve elected to raise the fed funds target
rate 50 basis points from 6% to 6.50%, bringing it to its highest level since
1991. This marks the sixth time since June of 1999 in which the Fed has raised
the fed funds target rate taking it from 4.75% to 6.50%.
The economy continued to grow at a brisk pace. First Quarter Gross Domestic
Product (GDP) rose 5.4%, following a 7.4% increase in the Fourth Quarter of
1999. Personal consumption expenditures, which account for two-thirds of overall
economic activity, rose at a 7.5% annual rate. The increase is the fastest since
the third quarter of 1985, when spending also rose at a 7.5% annual rate.
Throughout the tremendous expansion, inflation has remained well behaved.
However, recent signs have suggested that the tight labor market has put upward
pressure on wages and prices. The employment cost index (ECI) increased 1.4% in
the first quarter, up 4.3% from a year earlier. The first quarter increase in
the ECI compared with a year earlier was the biggest since a 4.3% rise in the
final three months of 1991. Wages and salaries, which make up about three
quarters of the index, rose 1.1% in the first quarter, after rising 0.9% in the
fourth quarter. Compared with the first quarter of last year, wages were up 4%.
Several indicators have showed a pickup in inflation. The GDP price deflator, a
measure of price increases followed by many investors, grew at a 2.7% annual
rate in the first quarter. That is the fastest since the first quarter of 1997.
The Producer Price Index (PPI) was up 3.9% compared with April of last year and
prices are also up at the consumer level. The Consumer Price Index (CPI) rose at
a 4.3% annual rate in the first four months of the year, compared with a 3.3%
pace in the same period a year ago. The core rate was rising at a 2.9% annual
rate in the first four months compared with a 2.1% pace in the same period of
1999. These signs of increasing inflation combined with the decline in the
unemployment rate are what most likely led the Fed to abandon their gradualist
approach of 25 basis point tightenings and to raise the fed funds target 50
basis points in May.
Due to those recent signs that suggest inflation pressures have begun to emerge
and that currently there are very few signs of any slowdown in the economy, we
expect the fed to further raise the fed funds target at least once more in the
months ahead. However, we do expect these rate hikes to cause economic growth to
slow in the months ahead.
2
<PAGE>
TRUSTEES AND OFFICERS
William T. Sullivan, Jr. C. Roderick O'Neil
Chairman and Trustee Trustee
Frank Bivona William J. Reynolds
Trustee Trustee
Harvey A. Fein Dr. Don I. Tharpe
Trustee Trustee
Michael P. Flanagan Anne E. Gill, Esq.
Trustee Secretary
Russell E. Galipo Peter Poillon
Trustee Treasurer
INVESTMENT ADVISOR/ADMINISTRATOR/TRANSFER AGENT
Cadre Financial Services, Inc.
905 Marconi Avenue
Ronkonkoma, New York 11779
DISTRIBUTOR
Cadre Securities, Inc.
905 Marconi Avenue
Ronkonkoma, New York 11779
CUSTODIAN
US Bank
US Bank Place
601 Second Avenue South
Minneapolis, Minnesota 55402
INDEPENDENT PUBLIC ACCOUNTANTS
KPMG LLP
757 Third Avenue
New York, New York 10017
LEGAL COUNSEL
Schulte, Roth & Zabel
900 Third Avenue
New York, New York 10022
3
<PAGE>
<TABLE>
<CAPTION>
CADRE INSTITUTIONAL INVESTORS TRUST
CADRE LIQUID ASSET FUND - MONEY MARKET SERIES
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
ASSETS:
<S> <C>
Investment in Cadre Institutional Investors Trust - Money Market
Portfolio, at value $37,341,238
Other assets 26,000
-----------
Total Assets 37,367,238
-----------
LIABILITIES:
Accrued administration fees 7,424
Accrued transfer agent fees 1,954
Accrued trustees' fees and expenses 497
Other accrued expenses
29,014
-----------
Total Liabilities 38,889
-----------
NET ASSETS $37,328,349
===========
Shares of beneficial interest outstanding 37,328,349
===========
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE $ 1.00
===========
NET ASSETS CONSIST OF:
Common Stock, at par value $ 37,328
Paid-in capital in excess of par value 37,291,021
-----------
NET ASSETS $37,328,349
===========
The accompanying notes are an integral part of these financial statements.
4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CADRE INSTITUTIONAL INVESTORS TRUST
CADRE LIQUID ASSET FUND - MONEY MARKET SERIES
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED APRIL 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
INVESTMENT INCOME:
INVESTMENT INCOME AND EXPENSES ALLOCATED FROM CIIT MONEY MARKET PORTFOLIO
<S> <C>
Interest $ 1,135,511
Expenses 20,788
-----------
NET INVESTMENT INCOME FROM CIIT
MONEY MARKET PORTFOLIO 1,114,723
EXPENSES:
Administration fees $ 36,345
Transfer agent fees 9,565
Custodian fees 28,065
Audit fees 4,987
Printing fees 2,384
Other expenses 3,266
-----------
Total expenses 84,612
Less: Fee waivers and expense reimbursements (15,095)
-----------
Net expenses 69,517
-----------
NET INVESTMENT INCOME $ 1,045,206
===========
The accompanying notes are an integral part of these financial statements.
5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CADRE INSTITUTIONAL INVESTORS TRUST
CADRE LIQUID ASSET FUND - MONEY MARKET SERIES
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
--------------------------------------------------------------------------------
FOR THE PERIOD
MAY 3, 1999
(COMMENCEMENT OF
SIX MONTHS ENDED OPERATIONS) THROUGH
APRIL 30, 2000 OCTOBER 31, 1999
----------------- ------------------
OPERATIONS:
<S> <C> <C>
Net investment income $ 1,045,206 $ 915,609
------------- -------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income (1,045,206) (915,609)
------------- -------------
SHARE TRANSACTIONS:
Net proceeds from sales of shares 291,826,232 260,956,239
Net asset value of shares issued to shareholders in
reinvestment of dividends 1,045,206 915,609
Cost of shares redeemed (291,957,994) (225,456,943)
------------- -------------
Net increase in net assets resulting from
share transactions 913,444 36,414,905
------------- -------------
Total increase in net assets 913,444 36,414,905
NET ASSETS:
Beginning of period 36,414,905 0
------------- -------------
End of period $ 37,328,349 $ 36,414,905
============= =============
OTHER INFORMATION:
Share Transactions:
Shares sold 291,826,232 260,956,239
Shares issued to shareholders in reinvestment of dividends 1,045,206 915,609
Shares repurchased (291,957,994) (225,456,943)
------------- -------------
Net increase in shares outstanding 913,444 36,414,905
============= =============
The accompanying notes are an integral part of these financial statements.
6
</TABLE>
<PAGE>
CADRE INSTITUTIONAL INVESTORS TRUST
CADRE LIQUID ASSET FUND - MONEY MARKET SERIES
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
NOTE 1 - ORGANIZATION
Cadre Institutional Investors Trust (the "Trust") (formerly known as Ambac
Treasurer's Trust), was organized in April 1996, as a Delaware business trust
and is registered as an open-end management investment company under the
Investment Company Act of 1940, as amended (the "1940 Act"). The Trust is
comprised of ten series as follows: Cadre Liquid Asset Fund - U.S. Government
Series, Cadre Liquid Asset Fund - Money Market Series, Cadre Affinity Fund -
U.S. Government Series, Cadre Affinity Fund - Money Market Series, Cadre Reserve
Fund - U.S. Government Series, Cadre Reserve Fund - Money Market Series, Cadre
SweepCash Fund - U.S. Government Series, Cadre SweepCash Fund - Money Market
Series, U.S. Government Money Market Portfolio and Money Market Portfolio.
Previously the Trust offered the Ambac U.S. Treasury Money Market Fund, which
ceased operations on June 30, 1997. The accompanying financial statements and
financial highlights are those of the Cadre Liquid Asset Fund - Money Market
Series (the "Fund"). The Fund commenced operations on May 3, 1999.
The Fund invests all of its investable assets in the Money Market Portfolio (the
"Portfolio"). The Portfolio is a series of the Trust that has substantially the
same investment objectives, policies and restrictions as the Fund.
The value of the Fund's investment in the Portfolio, as reflected in the
Statement of Assets and Liabilities, reflects the Fund's proportionate interest
in the net assets of the Portfolio (5.3% at April 30, 2000.) The performance of
the Fund is directly affected by the performance of the Portfolio. The financial
statements of the Portfolio, including the Schedule of Investments, are included
elsewhere in this report and should be read in conjunction with the Fund's
financial statements.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
VALUATION OF SECURITIES
Valuation of securities by the Portfolio is discussed in Note 2 of the
Portfolio's Notes to Financial Statements, which are included elsewhere in this
report.
7
<PAGE>
CADRE INSTITUTIONAL INVESTORS TRUST
CADRE LIQUID ASSET FUND - MONEY MARKET SERIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
APRIL 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
INVESTMENT INCOME
The Fund records its proportionate share of net investment income and realized
gains and losses each day. Net investment income and realized gains and losses
of the Portfolio are allocated on a pro-rata basis among the Fund and the other
investors in the Portfolio at the time of such determination.
DIVIDENDS TO SHAREHOLDERS
Substantially all of the Fund's net investment income and net realized capital
gains, if any, are declared as dividends daily and paid monthly. Net short-term
capital gains, if any, are distributed in accordance with the requirements of
the Internal Revenue Code of 1986, as amended (the "Code"), and may be reflected
in the Fund's daily dividend rate. Substantially all of the realized net
long-term capital gains, if any, are declared and paid annually, except that an
additional capital gains distribution may be made in a given year to the extent
necessary to avoid the imposition of federal excise tax on the Fund. Income
dividends and capital gain distributions are determined in accordance with
income tax regulations, which may differ from generally accepted accounting
principles.
FEDERAL INCOME TAXES
The Trust is treated as a separate entity for federal income tax purposes and
intends to qualify each year as a "regulated investment company" under
Subchapter M of the Code and to make distributions of substantially all of its
income, including net realized capital gains, if any, to relieve it from
substantially all Federal income and excise taxes. Therefore, no Federal tax
provision is required.
EXPENSES
Expenses incurred by the Trust with respect to any two or more funds in the
Trust are allocated in proportion to the net assets of each fund, except where
allocation of direct expenses to each fund can otherwise be made fairly.
Expenses directly attributable to a fund are charged to that fund.
NOTE 3 - TRANSACTIONS WITH AFFILIATES
The Trust, on behalf of the Fund, has entered into an Administration Agreement
with Cadre Financial Services, Inc. ("Cadre"), a wholly-owned subsidiary of
Ambac Financial Group, Inc., under which Cadre is responsible for certain
aspects of the administration and operation of the Fund. For its services, Cadre
is paid an annual fee of 0.19% of the Fund's first $250 million average daily
net assets, 0.165% of the Fund's next $750 million average daily net assets and
0.14% of the Fund's average daily net assets in excess of $1 billion.
The Trust, on behalf of the Fund, has entered into a Transfer Agent Agreement
with Cadre, under which Cadre is responsible for providing shareholder
recordkeeping services to the Fund. For its services, Cadre is paid an annual
fee of 0.05% of the Fund's first $250 million average daily net assets, 0.04% of
the Fund's next $750 million average daily net assets and 0.03% of the Fund's
average daily net assets in excess of $1 billion.
Cadre Securities, Inc. (the "Distributor"), a wholly-owned subsidiary of Ambac
Financial Group, Inc., acts as the exclusive distributor of the Trust's shares.
8
<PAGE>
CADRE INSTITUTIONAL INVESTORS TRUST
CADRE LIQUID ASSET FUND - MONEY MARKET SERIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
APRIL 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
Certain officers of the Trust may be officers of Cadre and/or the Distributor or
their affiliates. Such officers receive no compensation from the Trust for
serving in their respective roles. Trustees who are not employees of Cadre
and/or the Distributor or their affiliated companies, are each paid an annual
retainer of $5,000 and receive an attendance fee of $750 for each meeting of the
Board of Trustees they attend. Members of the Audit Committee receive an
attendance fee of $750 for each Audit Committee meeting they attend. The
Chairman of the Audit Committee receives an additional $1,000 annual fee.
Officers of the Trust receive no compensation from the Trust.
NOTE 4 - WAIVER OF FEES AND REIMBURSEMENT OF EXPENSES
Cadre has voluntarily agreed to waive a portion of its fees and to reimburse the
Fund for certain expenses to the extent the total operating expenses of the fund
exceed 0.47% (annualized) of the Funds average daily net assets. During the six
month period ended April 30, 2000, Cadre waived fees of $16,887 so that the Fund
could meet this expense limitation.
The Fund has adopted an Excess Expense Reimbursement Plan (the "Plan") pursuant
to which the Fund has agreed to reimburse Cadre for any waived fees or
reimbursed expenses to the extent the Fund's total operating expenses go below
the expense limitation of 0.47% (annualized) of the Fund's average daily net
assets. The Plan, which has a term of three years, terminates on March 16, 2002.
During the six month period ended April 30, 2000, the Fund reimbursed Cadre
$1,792, pursuant to the terms of the Plan.
9
<PAGE>
<TABLE>
<CAPTION>
CADRE INSTITUTIONAL INVESTORS TRUST
CADRE LIQUID ASSET FUND - MONEY MARKET SERIES
FINANCIAL HIGHLIGHTS (UNAUDITED)
---------------------------------------------------------------------------------------------------------------------------------
Selected data for a share of beneficial interest outstanding, is as follows:
FOR THE PERIOD
MAY 3, 1999
(COMMENCEMENT OF
SIX MONTHS ENDED OPERATIONS) THROUGH
APRIL 30, 2000 OCTOBER 31, 1999
---------------- -----------------------
For a share outstanding throughout the period:
<S> <C> <C>
Net asset value, beginning of period $ 1.00 $ 1.00
------- -------
Income from investment operations:
Net investment income (1) 0.0272 0.0236
Less dividends:
Dividends from net investment income (0.0272) (0.0236)
------- -------
Net increase in net asset value -- --
------- -------
Net asset value, end of period $ 1.00 $ 1.00
======= =======
Ratio/Supplemental Data:
Total return 2.75%** 2.40%**
Net assets, end of period (000's) $37,328 $36,415
Ratio to average net assets:
Net investment income including reimbursement/waiver 5.43%* 4.72%*
Operating expenses including reimbursement/waiver 0.47%* 0.47%*
Operating expenses excluding reimbursement/waiver 0.55%* 0.94%*
<FN>
(1) Net investment income per share before waiver of fees and reimbursement of
expense by the Investment Advisor was $0.0268 for the six month period ended
April 30, 2000 and $0.0212 for the period ended October 31, 1999.
*- Annualized
**- Unannualized
</FN>
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
CADRE INSTITUTIONAL INVESTORS TRUST
MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS
APRIL 30, 2000 (UNAUDITED)
-----------------------------------------------------------------------------------------
PRINCIPAL YIELD TO
AMOUNT DESCRIPTION MATURITY ON DATE VALUE
(IN THOUSANDS) MATURITY DATE OF PURCHASE (NOTE 2)
-------------- ------------- ----------- --------
COMMERCIAL PAPER - 95.7%
<C> <S> <C> <C>
$ 25,000 Akzo Nobel Inc. 6.12% $24,855,382
June 5, 2000
30,000 American Express Credit Corp. 6.16 29,919,733
May 17, 2000
25,000 American General Corp. 6.09 24,868,444
June 2, 2000
25,000 Archer Daniels Midland Co. 6.19 24,852,951
June 5, 2000
25,000 Bear Stearns Co. Inc. 6.09 24,962,875
May 10, 2000
30,000 Centric Capital Corp. 6.21 29,822,667
June 5, 2000
30,000 Ciesco LP 6.18 29,929,417
May 15, 2000
25,000 CIT Group Holdings Inc. 6.08 24,856,354
June 5, 2000
15,546 Clipper Receivables Corp. 6.09 15,507,653
May 16, 2000
15,000 Clipper Receivables Corp. 6.14 14,912,938
June 5, 2000
30,000 Coca Cola Company 6.16 29,809,050
June 8, 2000
25,000 Daimler-Chrysler NA Hldg 6.08 24,930,229
May 18, 2000
The accompanying notes are an integral part of these financial statements.
11
<PAGE>
CADRE INSTITUTIONAL INVESTORS TRUST
MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS
APRIL 30, 2000 (UNAUDITED)
-----------------------------------------------------------------------------------------
PRINCIPAL YIELD TO
AMOUNT DESCRIPTION MATURITY ON DATE VALUE
(IN THOUSANDS) MATURITY DATE OF PURCHASE (NOTE 2)
-------------- ------------- ----------- --------
COMMERCIAL PAPER - (CONTINUED)
$ 25,000 Dresdner US Finance 6.04 % $24,971,319
May 8, 2000
30,000 DuPont (E.I.) de Nemours & Co. 6.16 29,809,050
June 8, 2000
25,000 Ford Motor Credit Corp. 6.16 24,849,250
June 6, 2000
25,000 General Electric Capital Corp. 6.07 24,934,444
May 17, 2000
11,240 General Motors Acceptance Corp. 6.07 11,236,310
May 3, 2000
25,000 Goldman Sachs Group LP 6.30 24,560,313
August 14, 2000
30,000 Merrill Lynch & Co. 6.21 29,787,550
June 12, 2000
30,000 Morgan Stanley Dean Witter 6.17 29,853,792
May 30, 2000
25,000 New Center Asset Funding A-1+ 6.08 24,872,771
June 1, 2000
25,000 Prudential Funding Corp. 6.08 24,930,229
May 18, 2000
30,000 Salomon Smith Barney Holdings 6.22 29,802,400
June 9, 2000
25,000 San Paolo US Financial Co. 6.23 4,784,667
June 21, 2000
The accompanying notes are an integral part of these financial statements.
12
<PAGE>
CADRE INSTITUTIONAL INVESTORS TRUST
MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS
APRIL 30, 2000 (UNAUDITED)
-----------------------------------------------------------------------------------------
PRINCIPAL YIELD TO
AMOUNT DESCRIPTION MATURITY ON DATE VALUE
(IN THOUSANDS) MATURITY DATE OF PURCHASE (NOTE 2)
-------------- ------------- ----------- --------
COMMERCIAL PAPER - (CONTINUED)
$ 30,000 Sweetwater Capital 6.16% $29,879,200
May 25, 2000
25,000 Teachers Insurance & Annuity Assoc. 6.17 24,869,757
June 1, 2000
20,000 Triple-A One Funding Corp. 6.22 19,881,778
------------
June 5, 2000
Total Commercial Paper 678,250,523
------------
(amortized cost $678,250,523)
U.S. GOVERNMENT AGENCY OBLIGATIONS - 4.2%
5,000 Federal Home Loan Bank 5.51 4,999,889
July 21, 2000
25,000 Federal National Mortgage Assoc. 6.55 24,979,624
------------
February 23, 2001
Total U.S. Government Agency
Obligations
(amortized cost $29,979,513) 29,979,513
------------
Total investments - 99.9% 708,230,036
(amortized cost $708,230,036)
Other assets in excess of 290,020
------------
Liabilities - 0.1%
Total net assets - 100.0% $708,520,056
============
The accompanying notes are an integral part of these financial statements.
13
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CADRE INSTITUTIONAL INVESTORS TRUST
MONEY MARKET PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
ASSETS:
<S> <C>
Investments, at value $708,230,036
Cash
3,593
Interest receivable 380,736
------------
Total Assets 708,614,365
------------
LIABILITIES:
Investment advisory fees payable 47,941
Accrued trustees' fees and expenses
3,719
Other accrued expenses
42,649
------------
Total Liabilities 94,309
------------
NET ASSETS $708,520,056
============
The accompanying notes are an integral part of these financial statements.
14
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CADRE INSTITUTIONAL INVESTORS TRUST
MONEY MARKET PORTFOLIO
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED APRIL 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
INVESTMENT INCOME:
<S> <C>
Interest $21,067,228
EXPENSES:
Investment advisory fees 283,725
Custodian fees 22,397
Accrued trustees' fees and expenses 20,208
Audit fees 12,465
Legal fees 9,470
Other expenses 3,833
-----------
Net expenses 352,098
-----------
NET INVESTMENT INCOME $20,715,130
===========
The accompanying notes are an integral part of these financial statements.
15
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CADRE INSTITUTIONAL INVESTORS TRUST
MONEY MARKET PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
--------------------------------------------------------------------------------
FOR THE PERIOD
MAY 3, 1999
(COMMENCEMENT OF
OPERATIONS) THROUGH
SIX MONTHS ENDED OCTOBER 31, 1999
APRIL 30, 2000
---------------- ----------------------
OPERATIONS:
<S> <C> <C>
Net investment income $ 20,715,130 $ 4,976,187
--------------- ----------------
SHARE TRANSACTIONS:
Contributions 5,202,096,950 1,913,721,258
Withdrawals (5,222,812,536) (1,210,176,933)
--------------- ----------------
Net (decrease) increase in net assets 703,544,325
resulting from share transactions (20,715,586)
--------------- ----------------
Total (decrease) increase in net assets (456) 708,520,512
Beginning of period 708,520,512 0
--------------- ----------------
End of period $ 708,520,056 $ 708,520,512
=============== ================
---------------------------------------------------------------------------------
SUPPLEMENTARY DATA:
Ratio to average net assets:
Net expenses 0.10%* 0.15%*
Net investment income 5.84%* 5.23%*
<FN>
* - Annualized
The accompanying notes are an integral part of these financial statements.
</FN>
16
</TABLE>
<PAGE>
CADRE INSTITUTIONAL INVESTORS TRUST
MONEY MARKET PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
NOTE 1 - ORGANIZATION
Cadre Institutional Investors Trust (the "Trust") (formerly known as Ambac
Treasurer's Trust), was organized in April 1996, as a Delaware business trust
and is registered as an open-end management investment company under the
Investment Company Act of 1940, as amended (the "1940 Act"). The Trust is
comprised of ten series as follows: Cadre Liquid Asset Fund - U.S. Government
Series, Cadre Liquid Asset Fund - Money Market Series, Cadre Affinity Fund -
U.S. Government Series, Cadre Affinity Fund - Money Market Series, Cadre Reserve
Fund - U.S. Government Series, Cadre Reserve Fund - Money Market Series, Cadre
SweepCash Fund - U.S. Government Series, Cadre SweepCash Fund - Money Market
Series, U.S. Government Money Market Portfolio and Money Market Portfolio.
Previously the Trust offered the Ambac U.S. Treasury Money Market Fund, which
ceased operations on June 30, 1997. The accompanying financial statements and
supplementary data are those of the Money Market Portfolio (the "Portfolio").
The Portfolio commenced operations on May 3, 1999.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the
Portfolio in the preparation of its financial statements.
VALUATION OF SECURITIES
Investments are valued at amortized cost, which approximates fair value. The
amortized cost method of valuation values a security at its cost on the date of
purchase and thereafter assumes a constant amortization to maturity of any
discount or premium, regardless of the impact of fluctuating interest rates on
the market value of instruments.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME
Securities transactions are recorded on a trade date basis. Interest income,
which includes the amortization of discounts and premiums, if any, is recorded
on an accrual basis. Net realized gains and losses on sales of securities are
determined by the identified cost method.
REPURCHASE AGREEMENTS
The Portfolio may engage in repurchase agreement transactions with institutions
that the Trust's adviser has determined are creditworthy pursuant to guidelines
established by the Trust's Board of Trustees. The Portfolio's custodian or
designated subcustodians, as the case may be under tri-party repurchase
agreements, takes possession of the collateral pledged for investments in
17
<PAGE>
CADRE INSTITUTIONAL INVESTORS TRUST
MONEY MARKET PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
repurchase agreements on behalf of the Portfolio. It is the policy of the
Portfolio to value the underlying collateral daily on a mark-to-market basis to
determine that the value, including accrued interest, is at least equal to the
repurchase price plus accrued interest. In the event of default of the
obligations to repurchase, the Portfolio has the right to liquidate the
collateral and apply the proceeds in satisfaction of the obligations. Under
certain circumstances, in the event of default or bankruptcy by the other party
to the agreement, realization and/or retention of the collateral or proceeds may
be subject to legal proceedings.
FEDERAL INCOME TAXES
The Portfolio intends to be treated as a partnership for federal income tax
purposes. As such, each investor in the Portfolio will be taxed on its share of
the Portfolio's ordinary income and capital gains. It is intended that the
Portfolio's assets will be managed in such a way that an investor in the
Portfolio will be able to satisfy the requirements of Subchapter M of the
Internal Revenue Code of 1986, as amended. The cost of securities is
substantially the same for book and tax purposes.
EXPENSES
Expenses incurred by the Trust with respect to any two or more funds in the
Trust are allocated in proportion to the net assets of each fund, except where
allocation of direct expenses to each fund can otherwise be made fairly.
Expenses directly attributable to a fund are charged to that fund.
NOTE 3 - TRANSACTIONS WITH AFFILIATES
The Trust, on behalf of the Portfolio, has entered into an Investment Advisory
Agreement with Cadre Financial Services, Inc. ("Cadre"), a wholly-owned
subsidiary of Ambac Financial Group, Inc., whereby Cadre provides investment
advisory services and administrative services to the Portfolio. For its
services, Cadre is paid an annual fee of 0.08% of the Portfolio's average daily
net assets.
Cadre Securities, Inc. (the "Distributor"), a wholly-owned subsidiary of Ambac
Financial Group, Inc., acts as the exclusive distributor of the Trust's shares.
Certain officers of the Trust may be officers of Cadre and/or the Distributor or
their affiliates. Such officers receive no compensation from the Trust for
serving in their respective roles. Trustees who are not employees of Cadre
and/or the Distributor or their affiliated companies, are each paid an annual
retainer of $5,000 and receive an attendance fee of $750 for each meeting of the
Board of Trustees they attend. Members of the Audit Committee receive an
attendance fee of $750 for each Audit Committee meeting they attend. The
Chairman of the Audit Committee receives an additional $1,000 annual fee.
Officers of the Trust receive no compensation from the Trust.
18
